Wipro stuns with 120% profit spurt
Sensex jumps 81 points
Bigger tax break for bank VRS seekers sought
Bajaj Auto lifts 9.5% in group firm
AirTel joins tariff cut spree to take on rivals
GM to rival Fiat, Maruti station wagons
ITC Bhadrachalam returns to profit
CII seeks infrastructure tax holiday
City builders blast Lafarge
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan. 19: 
Wipro today reported a better-than-expected 120 per cent spurt in third-quarter net profit at Rs 188.8 crore compared with Rs 85.9 crore in the same period of 1999-2000. Analysts had predicted a figure of Rs 172 crore.

The results sent the share soaring 8 per cent to Rs 2,913.90 on the Bombay Stock Exchange, after opening at Rs 2,660. It scaled its intra-day high of Rs 2,929.50 on a turnover of Rs 344.92 crore.

Revenues in the three-month period stood at Rs 780.1 crore as against Rs 561.6 crore in the same period of the previous year. The nine-month net profit was pegged at Rs 450.5 crore (Rs 204.1 crore) on revenues of Rs 2,156.1 crore (Rs 1549.4 crore).

Third-quarter operating profit margins improved to 25 per cent from 16 per cent in the previous quarter. The rise in margins, officials said, was driven by a 17 per cent increase in billing rates.

Global infotech services accounted for 58 per cent of the revenues, which was up 82 per cent at Rs 1,250 crore. Europe contributed 28 per cent to the turnover, up from 24 per cent, Japan’s share rose to 7 per cent from 5 per cent, but revenues from the US declined to 64 per cent from 70 per cent.

Wipro’s software clients include Nortel Networks Corp, the world’s top supplier of fibre-optic network equipment, networking giant Cisco Systems, Japanese electronics giant NEC Corp and UK travel operator Thomas Cook.

Technology solutions (R&D services) made up 50 per cent of software revenues in the third quarter, enterprise solutions 45 per cent while the remaining 5 per cent came from global support.

The division bagged 26 new accounts in the third-quarter. Its customer base, the largest, accounted for 8 per cent of the third-quarter revenues compared with 15 per cent in 1999-2000.

The top 5 and 10 customers gave the company 29 per cent and 44 per cent of its revenues respectively. In the previous year, they accounted for 39 per cent and 53 per cent.

Revenues from companies with dotcom business models were up 1.5 per cent. Technology startups contributed 3.5 per cent to total revenues. Wipro Infotech, the Indian infotech services and products business, contributed 26 per cent while the consumer care and lightning business recorded a revenue of Rs 250 crore.


Mumbai, Jan. 19: 
Fund-based buying in both new and old economy shares and short-covering by operators today propelled the 30-share BSE sensex by 81 points to close at 4194.46 as against yesterday’s close of 4113.21.

The good buying support seen in technology counters followed a rally on the Nasdaq yesterday and excellent third-quarter performances by Wipro Ltd and Digital Equipment India Ltd. The tech-heavy Nasdaq got a major boost with an upbeat earnings forecast from IBM.

Reflecting the bullish trend, the BSE sensitive index opened past the 4125-resistance and surpassed the 4200 mark during intra-day trading. While the sensex opened at Rs 4149.25, it consistently remained in the positive zone and shot to a high of Rs 4201.94, before closing at Rs 4194.46, thus rising by 81 points.

Led by Wipro and Digital Equipment, where buying was seen right from the commencement of trading itself, the interest soon spread to other counters. Even media scrips and several old-economy scrips were seen to be part of the buying programme.

Some of the scrips which showed good gains during the day included Wipro, Digital, Infosys, Satyam, Zee Telefilms, NIIT, DSQ Software among several others. Among these, Zee spurted to Rs 263, before closing at Rs 261.50, thus rising by around 16 per cent as compared with the previous close. The counter, in fact, topped the volumes on the premier exchanges with over 2 crore shares traded.

Dealers said operators not only covered short positions but also made fresh commitments at the last day of the current settlement. Market circles expect the sensex to surpass the 4500-mark in the immediate term.


Calcutta, Jan. 19: 
Banks have asked for more tax-breaks to employees who opt for voluntary retirement schemes (VRS)

According to industry sources, Indian Banks’ Association (IBA) has written to the finance ministry asking it to raise the non-taxable limit for compensation packages from the existing Rs 5 lakh. The banking division of finance ministry has, in turn, asked the Central Board of Direct Taxes to consider the demand. “The ministry has not told us anything. We are waiting for its response,” the IBA sources said.

Most banks, except Corporation Bank, announced VRS packages that will result in over a lakh employees leaving the industry. “However, it is too early to put a finger on the precise number. Only Bank of India, Punjab National Bank and Vijaya Bank have completed their VRS exercises so far. A clear picture will emerge after March 31,” an industry source said.

No income tax is imposed up to Rs 5 lakh received in VRS payouts, but amounts above it are taxed at the rate of 34.5 per cent.

Sources say banking secretary Devi Dayal is working on the proposal, fuelling speculation that some tax concessions might be announced by the finance minister in the budget.

There are doubts whether it will be possible for the government to enlarge tax breaks, but a year-on-year 19 per cent increase in revenues till December has given many hope that something might come out of the budget next month.

The government has already collected Rs 44,381 crore so far, 62 per cent of the current year’s target of Rs 71,600 crore. Income tax collections till December have surpassed the last year’s figure by 36.8 per cent on a month-to-month basis.

Unions, opposed to the very principle of job reductions through VRS, have not lent their voice to the clamour for tax breaks. “We are against VRS and we would not like to discuss the matter in any case,” S.R. Sengupta, general secretary of All India Bank Officers’ Confederation.

Banks, which will have to make a provision for VRS payments in their balance-sheets for the current financial year and will see their bottomline shrink, have no assurance from the government that they will be given money to pay employees. Sources said IBA is currently inviting suggestions from auditors on whether banks should make full provisioning for the VRS payouts in this year’s accounts, or do so in a phased manner.

The association will take up the matter with the government. “It will hit the weak banks most. Others have funds to implement their VRS programmes. They might bridge the gap through increasing the Tier-I or Tier-II capital. Most of them will boost their Tier-II kitty,” bank officials said.


Mumbai, Jan. 19: 
Bajaj Auto Ltd (BAL) plans to acquire 1.20 million equity shares of Mukand Engineers, a group company. The number of shares to be acquired constitute approximately 9.5 per cent of the total voting share capital of Mukand Engineers Ltd.

The shares will be acquired from Mukand Ltd, another group company. The additional shares enhanced the existing paid-up share capital from Rs 11.99 crore to Rs 12.59 crore.

Mukand Engineering shares closed the day on the Bombay stock exchange at Rs 46.50 from previous day’s close of Rs 47.20.

While Bajaj Auto has an active portfolio of equity shares with large stakes which include infotech companies, analysts tracking the Bajaj group of companies see the transfer a part of a larger plan to restructure its group holdings.

Mukand Ltd needs funds to expand and run its existing steel business and is currently going through a rough patch. The company may be pull itself out of a morass by encashing its liquid assets.

Bajaj Auto has sizable equity stakes in financial institutional major ICICI Ltd, Bajaj Tempo and a few market-related portfolio investments.

Analysts say the deal may be part of a grand plan by the Bajaj & Shah families to reorganise their businesses and equity stakes in their group companies.

Incidentally, some time in October 2000, the board of Mukand Engineers had allotted 5.98 lakh shares, amounting to 4.99 per cent of the existing issue capital of the company at a valuation in accordance with Sebi guidelines towards the partial discharge of the consideration of the acquisition of business.

F.C. Kohli of Tata Consultancy Services is on the board of Mukand Engineers.

Mukand Engineers is said to have a backlog of orders worth Rs 74.06 crore at the start of the current fiscal. The company recently made a foray into software development and consulting.

The company also recently tied up with Magic Infotech, an Israeli company, to provide authorised training for their application development tools. The quality of training has been maintained at the highest level, achieving the rating as one of the best institutes within the training industry.

The company is also planning to set up development centres. The company has also tied up with IBM in 1998 and set up authorised training centre at Kurla for high-end computer training.

The company, essentially an engineering and contracting firm has submitted bids for various jobs for petrochemical plants, refineries, nuclear power projects, aluminium plant, steel plant, power plants and water plants.

The company has also identified the scope of business in the highway projects, in terms of the country’s growing demand for improving its infrastructure. The World Bank and several other international bodies have expressed interest and support in funding these projects.


New Delhi, Jan. 19: 
The initial tremors of the rate war unleashed by Mahanagar Telephone Nigam Ltd on January 12 are being felt across the cellular industry.

Hours after old rival Essar lowered its air-time charges, AirTel, cellular service provider in Delhi, today slashed its air-time rates but kept them marginally higher than those offered by MTNL and Essar.

AirTel slashed its rates by 60 per cent for incoming calls at Rs 1.60 per call (of 30 seconds pulse) and by 29 per cent for outgoing calls at Rs 2.85 per minute.

MTNL’s entry into cellular services has seen most of the cellular service providers in the country slashing their tariffs.

MTNL has proposed to offer cellular services in Delhi from January 26 for Rs 2.70 per minute (30 second pulse) for outgoing and Rs 1.50 for incoming calls. It has proposed a rental of Rs 400 per month.

Essar, the other cellular service provider in Delhi, lowered its airtime charges at Rs 2.80 per minute (30 second pulse) and Rs 1.60 for incoming calls.

AirTel, a Bharti Group company with a subscriber base of more than 2.9 lakh, matches Essar’s incoming charge of Rs 1.60 and is marginally higher than MTNL which offers a charge of Rs 1.50.

While Essar offers a monthly rental of Rs 395, AirTel matches MTNL’s monthly rental of Rs 400 per month.

In the pre-paid card category, the company has reduced air-time rates to Rs 6 per minute for outgoing and Rs 4 for incoming against the existing rates of Rs 8 and Rs 6 respectively.    

New Delhi, Jan. 19: 
General Motors will launch a station wagon variant of the Corsa in India to take on the Siena Weekender station wagon from Fiat and the Baleno station wagon from Maruti. The company, while ruling out any plans to launch a small car in India, denied it was in any ‘active discussions’ with the government on picking up a stake in Maruti Udyog Ltd.

General Motors today launched three new versions of the Astra and Corsa — Corsa Royale, New Astra Club 2001 and Astra Club petrol — which takes its total offering in the Indian market to nine.

Launching the three versions of the Corsa and Astra models, Aditya Vij, president and managing director General Motors India Ltd said, “We have decided to launch a station wagon on the Corsa platform, since a market study has shown that it is best suited for Indian conditions. Its concept and size fully meet the demands of Indian roads.”

The Corsa Royale 1.6 is priced at Rs 7.17 (ex-showroom Delhi), Astra Club petrol at Rs 9.89 lakh (ex-showroom Delhi), while the Astra Club diesel is priced at Rs 10.6 lakh (ex-showroom Delhi).

The company has set a target of selling 10,700 units of these two models in the calendar year 2001 as against 7,000 units during the same period last year.

“We have set a target of selling 3,000 Astra units and 7,700 units of Corsa in the current calendar year, in a segment which is expected to maintain the same growth of 10 per cent as last year,” said Vij. GM has achieved an indigenisation level of 72 per cent for Astra and 60 per cent for its Corsa models. The parts which are not indigenised include engine, transmission and skin. However, the company ruled out any plans to manufacture the engine and transmission units in India.

It has added features like upgraded interiors, root wood dashboard panels in addition to spoilers, alloy wheels, leather steering and an optional sunroof to the Corsa Royale. Further, the Astra sports a new feature called ‘multi intelligence digital display’ (MID). This will offer customers eight smart state-of-the-art digital information such as average fuel consumption, average speed over a certain distance, radio control information and range, said Vij.

The company has identified new models for the Indian market but will take a decision on launching them after the announcement of the auto policy.

“We are considering many options and a decision regarding the introduction of new models and widening of the portfolio will be taken after the announcement of the auto policy. The auto policy and post-QR environment will play a vital role in finalising our future plans,” said Vij.


Jan. 19: 
ITC Bhadrachalam Paperboards has reported a net profit of Rs 10.5 crore for the quarter ended December 31 compared with a loss of Rs 35.64 in the same period of the last financial year. Sales increased 33.11 per cent from Rs 10.64 crore to Rs 14.17 crore. Other income stood at Rs 2.40 crore as against Rs 96 lakh in the same period last year.

EID Parry net dips

EID Parry (India) has reported a net profit of Rs 6.9 crore for the quarter ended December 31 as against Rs 9.14 crore in the same period last financial year. Sales were up 18.56 per cent at Rs 330 crore from Rs. 278.34 crore in the same period last year.

Other income for the quarter ended December 31 stood at Rs 60 lakh compared with Rs 1.09 crore in the same period last year.

The shareholders approved the scheme of amalgamation of Pettavaittalai Sugars and Chemicals, Johnson Pedder Ltd and Dhyanyalakshmi Investments Ltd with the company at the general meeting held on January 8. The merger will be effective from April 1.

HCL Tech net up 176%

HCL Technologies has posted a net profit of Rs 114.98 crore for the quarter ended December 31, up a staggering 175.73 per cent from Rs 41.7 crore in the corresponding period last fiscal.

Net Sales have risen from Rs 90.7 crore in the quarter ended December 1999 to Rs 186.67 crore in the same period of 2000. Other income stood at Rs 30.1 crore compared with Rs 11.38 crore. The results were declared at the general meeting on January 8.

IPCL net spurts

Indian Petrochemicals Corporation Ltd (IPCL) has reported a 32.5 per cent increase in net profit to Rs 149.78 crore during the first nine months of the current fiscal as against Rs 113.03 crore posted in the corresponding period the previous year. Sales grew 37.3 per cent to Rs 3696.38 crore in April-December 2000-01 compared with Rs 2690.75 crore in the corresponding period last year, a company statement said here.

Sofia Software leaps

Sofia Software has posted a spectacular 290 per cent spurt in second-quarter net profit of Rs 3.72 crore compared with 95.53 lakh in the corresponding period of the last financial year. Total income from operations raced 286 per cent at Rs 11.66 crore from Rs 30.25 crore in the same period last year.

For the six months ended December 31, net profit shot up a whopping 398 per cent at Rs 6.66 crore from Rs 1.33 crore in the same period last year.


New Delhi, Jan. 19: 
The Confederation of Indian Industry (CII) has asked for extended tax holidays for infrastructure projects, if the budget for 2001-02 is to be anchored to the Prime Minister’s objective of a 9 per cent GDP growth.

CII has asked for a 15-year tax holiday for infrastructure projects in power generation, transmission and distribution, roads, railways, telecom, port facilities, transmission and distribution of natural gas and low-cost housing.

The chamber has sought a tax holiday for the first 10 years for civil aviation, tourism and middle-income housing and a 20-year tax holiday for social infrastructure projects.

CII president Arun Bharat Ram said poor investment and returns from infrastructure projects were the biggest constraint to GDP growth. CII chief economist Omkar Goswami, detailing the industry view, made a case for widening the service tax net.


Calcutta, Jan. 19: 
Three major builders’ associations today directly named French cement major Lafarge as the initiator of the cartelisation in the cement industry and alleged the government was a party to the sudden increase in prices by Rs 1,000 per tonne.

Top members of the Builders Association of India, Confederation of Real Estate Developers Association of India and the City Developers’ Forum, Calcutta, at a jointly held a press conference today, noted the hike in cement prices by the manufacturers had followed the government’s notification increasing import duty from 35 per cent to 65 per cent on November 24.

“Lafarge could be a small player in the Indian market, but it is strong enough to mould others,” said A. N. Shroff, president of the City Developers’ Forum.

Lafarge took the leadership in the move, while all other domestic cement majors such as Grasim, Gujarat Ambuja followed suit and were also involved in gaining tacit apporval from the government.

The building constructors and real estate developers also announced their decision to cease work in the eastern region on January 24 and 25 in view of the sudden steep increase in cement prices.

They sought urgent intervention by the government, demanding prices be brought down to normal to save an extra annual expenditure of Rs 40,000 crore.

Terming the hike as ‘apparently without reason or any scarcity of material,’ representatives of associations sensed ‘a conspiracy’ saying the hike in prices was implemented within 15 days of the government issuing a circular increasing import duty on cement from 35 per cent to 65 per cent.

“The whole thing has been very well planned. The government was being persuaded for sometime and on November 24 2000, by a circular number 44 (RE 2000) 1997-2000 the import policy on cement was modified to effect an increase in duty from 35 per cent to 65 per cent. Apart from this, three more restrictive conditions were listed in the circular: 1) all cement importers should have BIS registration; 2) all imported materials should have BIS registration and 3) all principles of anti-dumping duty have to be followed. The modifications were effected despite the fact that there has been no import of cement and therefore, the question of dumping does not arise,” the three construction bodies noted in a release.

The spokesmen said international prices of cement were ruling at low levels and the landed price including duty and other charges would come to around Rs 115-120 for a 50 kg bag at 35 per cent duty. The domestic price of cement was also ruling around the same level.

But following the circular, cement manufacturers closed their factories and stopped despatches from November 27 to December 4 to create an artificial scarcity.

At around the same time, prices were increased by as much as Rs 50 per bag. This meant that the landed price of imported cement at the new import duty rate would come to around Rs 170 a bag, the same level as the domestic manufacturers were selling.

K. Swaminathan, general manager, sales at Lafarge when contacted, dismissed allegations of the company’s involvement in formation of the cartel or anyway influencing the government to increase import duties. “We are a small player with a capacity of 4.5 million tonne. We have strong presence only in the eastern region with no national relevance. We hardly have the clout to influence the national players in the industry,’’ Swaminathan noted.

But the builders noted that the cement industry initially had to cut prices by an average of Rs 4 per bag owing to the price war unleashed by Lafarge, whose entry into the Indian market was marked by its takeover of Tisco’s cement plant. A few more takeovers later, the French giant has strengthened itself enough to influence both the bigger players and the government, Shroff alleged.

Replying to questions, the association leaders noted while the cement industry had every right to increase prices but they should take the national interest into consideration and discuss the issue with the government and construction organisations.



Foreign Exchange

US $1	Rs.46.38	HK $1	Rs.  5.90*
UK £1	Rs.68.47	SW Fr 1	Rs. 28.40*
Euro	Rs.43.76	Sing $1	Rs. 26.30*
Yen 100	Rs.39.35	Aus $1	Rs. 25.75*
*SBI TC buying rates; others are forex market closing rates


Calcutta				Bombay

Gold Std (10gm)	Rs. 4505	Gold Std (10 gm)Rs.4440
Gold 22 carat	Rs. 4255	Gold 22 carat	Rs.4110
Silver bar (Kg)	Rs. 7875	Silver (Kg)	Rs.7870
Silver portion	Rs. 7975	Silver portion	Rs.7875

Stock Indices

Sensex		4194.46		+81.25
BSE-100		2182.09		+69.29
S&P CNX Nifty	1329.10		+23.15
Calcutta	125.62		+ 1.48
Skindia GDR	706.38		+21.19

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